Developing the Project Portfolio Management process and maturity step by step
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1 Developing the Portfolio Management process and maturity step by step Matti Haukka Partner, Senior Consultant, Institute Finland Ltd.
2 Challenge of PPM It is not so much the process and the system itself but how some basic prerequisites are working: Competence and processes of single PM Key roles ( Owner, PMO, PM and PPM Board) Strategy towards the Orientated company 2
3 Which tasks and endeavors should be managed using PM and PPM processes: No harmonized models: s Small unique assignments recurring processes s Small and medium sized projects Small unique assignments normaalit recurring processes prosessit Problem area! A B s C Small unique assignments recurring normaalit processes prosessit The blocks describe the distribution of work time of personnel in a company that has many projects 3
4 portfolio management process Strategy group Strategy Programs s Strategy checks PPM Board Portfolio budgeting to strategy E.g. twice/year Updating portfolio practices G1 G1 G2 G2 One meeting e.g. once/month Changes G4 G4 PMO Updating the portfolio status Communicating decisions comparison Resource analysis Resource analysis Overall portfolio status Strategic reporting Owner/ steering group Business plans s G0 G0 G1 G1 G2 G2 Changes G3 G3 G4 manager planning Reporting Final report 4
5 Five steps of PPM maturity model More What you get? than How well? 4.Systematic project prioritization 5. Pre- and Post-project evaluation of business benefits and continuous development of project culture 1. Awareness of ongoing projects 3. Resource management across all projects and other work 2. Awareness of the status and balance of projects Efficiency of project business. Faster realization of strategy 5
6 What you have on the beginning? Strategy group Strategy manager planning Reporting Final report 6
7 We know what projects are going on 1st step of PPM maturity model Key Role: Owner 1. Awareness of ongoing projects Owners 7
8 Level 1 prerequisites of functioning PPM Decision point model (stage-gate model) Clear definition of a what is managed as a project Updated project database Owner is the key role 8
9 portfolio management process (1st level) Strategy group Strategy Programs s Information Owner/ steering group Business plans s G0 G0 G1 G1 G2 G2 G3 G3 G4 manager 9
10 We know the status and balance of projects 2nd step of PPM maturity model Key role: PMO (= Management Office) 2. Awareness of the status and balance of projects 1. Awareness of ongoing projects PMO 10
11 portfolio management process (2nd level) Strategy group Strategy Programs s PMO Updating the portfolio status Communicating decisions Overall portfolio status Strategic reporting Owner/ steering group Business plans s G0 G0 G1 G1 G2 G2 Changes G3 G3 G4 manager Reporting 11
12 Level 2 Prerequisites of functioning PPM Harmonized Model Quality of status reporting should be good enough should have visible links with strategies PMO should be established 12
13 Transavia.com focus area s IPMA-courses 2009 Portfoliomanagement transavia.com Gerard Geurtjens, IPMA Advanced training course H : Managing Corporate Portfolios, Copenhagen March 2006, 2007,2008 and 2009,Shanghai October 2007, Croatia October 2008 ROCE 7% transavia.com is the travel brand in NL with attention for its customers milj. milj. milj. milj. milj. milj. milj. milj. Autonomous growth Building travel brand Development.com Low cost, High productivity Compliance Continuïty HRM, employee development
14 IPMA-courses 2009 Portfoliomanagement transavia.com Strategic report Planned autonomous growth, 10% building travel brand, 20% development.com, 20% low cost, high productivity, 20% compliance, 5% Gerard Geurtjens, IPMA Advanced training course H : Managing Corporate Portfolios, Copenhagen March 2006, 2007,2008 and 2009,Shanghai October 2007, Croatia October 2008 business continuity, 15% HRM, employee development, 10% Actual autonomous growth, 12% building travel brand, 7% development.com, 38% low cost, high productivity, 14% compliance, 17% business continuity, 7% HRM, employee development, 5%
15 Resource management is in control 3rd step of PPM maturity model Key role: Manager 3. Resource management across all projects and other work 2. Awareness of the status and balance of projects 1. Awareness of ongoing projects Managers 15
16 portfolio management process (3rd level) Strategy group Strategy Programs s G1 G1 G2 G2 One meeting e.g. once/month Changes G4 G4 PMO Updating the portfolio status Communicating decisions comparison Resource analysis Resource analysis Overall portfolio status Strategic reporting Owner/ steering group Business plans s G0 G0 G1 G1 G2 G2 Changes G3 G3 G4 manager planning Reporting Final report 16
17 Five steps and PPM maturity model Level 3 Prerequisites of functioning PPM: High quality planning, control and re-planning procedures Rules and principles to solve conflicts in use in a uniform and agreed manner Advanced PM and PPM software tools Manager is the key (critical) role 17
18 prioritization is done systematically 4th step of PPM maturity model Key role: PPM Board 4.Systematic project prioritization 3. Resource management across all projects and other work 2. Awareness of the status and balance of projects 1. Awareness of ongoing projects PPM Board 18
19 Level 4 Prerequisites of functioning PPM Owner s responsibility on achieving the business benefits and total success of the project should be emphasized PPM Board and its willingness and ability to put time effort on PPM Strategic level PMO should be established 19
20 portfolio management process (4th level) Strategy group Strategy Programs s Strategy checks PPM Board Portfolio budgeting to strategy E.g. twice/year Updating portfolio practices G1 G1 G2 G2 One meeting e.g. once/month Changes G4 G4 PMO Updating the portfolio status Communicating decisions comparison Resource analysis Resource analysis Overall portfolio status Strategic reporting Owner/ steering group Business plans s G0 G0 G1 G1 G2 G2 Changes G3 G3 G4 manager planning Reporting Final report 20
21 Level 4: Selection and Prioritisation We should have a funnel not a tunnel! Ideas G0 G1 Important Portfolio decisions G2 G3 G4 s Proposals 21
22 Selecting the right projects If Owners, PMO and PM s are taking care of their responsibilities, PPM Board can concentrate more on its most important task: Selecting the right projects! Important G0 Portfolio decisions Ideas G1 G2 G3 G4 22
23 5th step of PPM maturity model 5. Pre- and Post-project evaluation of business benefits and continuous development of project culture 4.Systematic project prioritization 2. Awareness of the status and balance of projects 1. Awareness of ongoing projects 3. Resource management across all projects and other work Oriented Organisation 23
24 PBO ( Based Organisation) Less hierarchy in permanent organisation ownership as a main role of management business success as a part of score cards No shattered projects Effective and systematic use of programme management approach 24
25 Shattered project An entity (collection of projects ) which is not producing any business benefits until its all projects have completed should not be shattered into separate projects Developing a product. Production dev. Marketing Long Time to Market Missing communication 25 Manager Owner One project Shattered projects Overlapping shortens Time to Market, but due to need of intensive communication, coordination and integration this entity should be managed as one project, and an owner who takes the whole responsibility on business benefits must be recognized.
26 Developing PM Culture Program/project oriented organisation PBO Corporate Portfolio Program Management PBO PPM PMO Managing single Programs PMO Single PM Source: Thiery (adjusted) 26
27 Summary and main conclusions Do not try to develop only your PPM Process and system think what are the main prerequisites to achieve the success Biggest challenge is that the project ownership is working in a good manner put your first efforts (training, guidelines, metrics, support and coaching) to develop this 27
28 Thank you! Questions? You are able to hear more on IPMA Advanced Course H Managing the corporate project portfolios Instructed by: Matti Haukka and Gerard Geurtjens 28
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